WellPoint Inc., the nation's largest health insurer, reported Wednesday that its second-quarter profit grew 34%, thanks largely to increased revenue from premiums and administrative fees.
Executives said the company also continued to benefit from its December acquisition of rival WellChoice Inc.
WellPoint's net income for the period grew to $751.2 million, or $1.17 a share, compared with $559.4 million, or 90 cents, during the same period last year. The latest period's results included 5 cents a share in stock-option expenses and a penny a share in investment losses.
Last year's results included costs of 10 cents a share related to a settlement of two lawsuits brought by physicians.
Revenue surged 27% to $14.2 billion from $11.1 billion a year earlier. Premiums climbed 27% while administrative fees increased 32%.
The Indianapolis-based company said it had enrolled more than 1.5 million people in its Medicare prescription program -- including 230,000 in the second quarter.
On average, analysts surveyed by Thomson Financial were looking for second-quarter earnings of $1.14 a share on sales of $14.08 billion.
Overall, WellPoint added 5.3 million customers, boosting its enrollment to 34.2 million members. About 4.8 million members were added through the WellChoice acquisition.
"Our WellPoint-WellChoice integration is going well and according to plan," Chief Financial Officer Dave Colby said.
Still, analysts were disappointed with the company's enrollment, which increased by 5,000 members from the first quarter.
"This is really disappointing for a company that enrolls business year-round, and we don't know what to make of it," Bank of America analyst Joseph France wrote to investors. "It could also mean the company is charging too much."
WellPoint shares fell 36 cents, or 0.5%, to $77.62 Wednesday.